Stakeholder Buy-In in EPC Projects: A Consultant’s Guide to Project Success

It's rare that a capital project simply fails due to a miscalculation of engineering. They fail because there was a lack of 'buy-in' from someone important, such as an owner, a financier, a regulator or a community leader, when it really mattered. For companies seeking out a turnkey EPC solution, buy-in from stakeholders isn't a 'soft' skill that sits on top of the technical aspects of the project. It is a deliverable that has its own timeline, its own budget and its own risk profile and deserves to be treated like design, procurement and construction.

This guide examines how experienced EPC project management consultants do the buy-in as a formal element of EPC project management, and not as an occasional occurrence dealt with in status meetings. The idea is not to inform, but to engage stakeholders, to get them interested so that when issues do occur, they are not critics, but partners.

Why Stakeholder Buy-In Is the First Deliverable, Not the Last

For many capital projects, stakeholder engagement becomes a communications exercise that increases as the construction gets started. At this time, key decisions, such as scope, site selection, technology decision and contracting strategies have already been made, and most likely there is not a full understanding of who and how it will affect them.

Stakeholder mapping is a crucial part of the EPC project lifecycle that begins with Front-End Loading, before the first contract is signed. When there is misalignment, it's relatively inexpensive to correct it, by way of a design change or a tweak to the timeline, or another consultation. When EPC execution starts, the same misalignment turns into a change of order, permitting delay and/or public dispute. By making buy-in an early delivery, the rest of the program schedule and budget are assured.

Mapping the Stakeholder Landscape on Capital Projects

There is rarely one audience that needs to be pleased by a capital-intensive project. A typical build includes owners and boards looking for ROI, the financier who monitors the funding of the project on a milestone basis, the regulator who monitors the permitting and safety of the project, the engineering and construction team who monitors the scope of the project, and sometimes the local community where the construction is taking place or where the project is sitting in the long-term.

Project success is defined in various ways by each group. The success of commissioning can be measured by the date of commissioning and by the total installed cost. It is measured by a regulator in documented compliance. The community's measurement is noise, traffic, and long-term impact. Otherwise, project teams become reactive rather than proactive, reacting to friction rather than preventing it, and without a clear picture of who is the stakeholder, what is the stakeholder's need, and when is the stakeholder's need.

Where Turnkey EPC Solutions Simplify — and Complicate — Buy-In

This is where a turnkey delivery model really shines: One point of accountability. Owners aren't managing separate contracts for engineering, procurement and construction; eliminating an obvious way for a blame game to begin if something goes wrong.

However, the same one-size-fits-all accountability level jackpots communication. If one EPC partner is responsible for the entire lifecycle, the stakeholders have also a higher level of trust in the EPC partner's reporting, forecasting and problem-solving. When things go wrong, there's no one else in that chain to pass it up to the other, and no quick way to regenerate trust during the project.

The best Turnkey EPCs do not leave the trust to chance after signing the contract but see to its management. This is proactive reporting, not reactive reporting.

Practical Strategies for Building Buy-In Across the Lifecycle

There are some actions that are repeatedly observed that distinguish projects that are consistently in line with the stakeholder from others that are forever in conflict.

Involve before Involve Did. Engage relevant parties, such as regulators and community members (if applicable) early in scoping discussions prior to the FID. It is much easier to get their input early in the process than to fit it in later.

Schedule a stage/gate alignment review. Pause at the key project lifecycle stages (procurement award, construction start, commissioning) to ensure that the expectations of the stakeholders are still aligned to the project. The scope and timeline adjust; drift review alignment to avoid compounding drift.

Utilize a RACI matrix that stakeholders can understand. When everyone understands who Responsible, Accountable, Consulted and Informed is, the "no one told us" Often heard is likely that someone was told too late, or that no one told them at all.

Communicate in appropriate format to the audience. Executives are looking for a quick overview of budget, schedule, and risk. There is a need for documented and traceable compliance records from regulators. Communities are demanding clear communication in a non-technical manner. The problem is that there is no one communication style that works for all three.

Record actions, not only results. If you get approval to make a scope of change, document the reason for the change, not just the changes made. If another stakeholder calls into question the decision that had been made six months prior, then this protects the project.

Have an owner for each stakeholder relationship. The name of stakeholder management implies that it is everyone's responsibility, which typically means no one's responsibility. Naming one point of contact for each stakeholder group will result in quicker and more consistent response to questions, as opposed to bouncing from who is available.

The Consultant's Role: Translating Between Technical and Strategic Language

One of the least appreciated roles of EPC project management consultants is translation – converting engineering detail to strategic language for the executives to act on and translating executive priorities to direction for engineering teams to execute on.

Consultants are also helpful to mediators when disagreements occur, because of their translation role. They are often beyond the day-to-day reporting structure, which means they are not affected by the internal politics that can put off such conversations when they are raised by staff in the closer day-to-day reporting chain, or by fear about the reception the message will get internally.

Turning Buy-In into a Competitive Advantage

Stakeholders buy-in is frequently mentioned as a risk mitigation or a risk avoidance measure, or even as a technique to prevent disputes and delays. It's an understatement on the value of that framing. Projects that stay true to themselves throughout the project lifecycle also get done quicker: fewer change orders to negotiate, fewer appeals to fight for approvals, fewer late-stage redesigns to accommodate.

With certain capital-driven businesses, a single month of delay may mean the difference between a healthy line of credit and racking up the financing charges, so that speed is no less a financial gain than a more pleasant customer interaction. Buy-in is not a courtesy provided with the value of the project, but it is the value itself when project management is strong.

Building Buy-In into Your Next Capital Project

The importance of stakeholder buy-in is regularly brought up in a protective manner to prevent delays and conflicts or as a means of risk reduction. That's the bare minimum interpretation of its worth. Projects that stay on track over the course remain on schedule, too; there are less changes in orders to negotiate, less permitting appeals to fight, and less redesigns to do late in the design phase to absorb.

In industries where a month delay over the schedule might cost the company a lot of money in financing, that speed is a piece of money coming back — not simply a better stakeholder relationship. In EPC, buy-in is not a by-product but a part of the value that the project management delivers.

---

Alga Processing LLC is an organization that helps your business in operations and management. Its people come from various backgrounds of knowledge and experience that promote a healthy environment for your personnel. Your organization will benefit from ensuring you and your team members are there every day to give the time and talent to yield productivity to its maximum. Contact us for more information on how to help your business grow.